US dollar falls on lackluster data

[NEW YORK] The dollar dipped against the euro and the yen Friday following lackluster US economic data.

The Federal Reserve reported that US industrial production fell 0.6 per cent in March, matching the decline in February.

Meanwhile the University of Michigan's survey of consumer sentiment showed consumer confidence fell to 89.7 in April from 91.0 in March, the fourth consecutive monthly decline.

"Outside of a few upside surprises, most of this week's US economic reports highlight the ongoing challenges in the US economy," said Kathy Lien, analyst at BK Asset Management.

Lien predicted the US Federal Reserve at its next meeting later in April would refrain from further interest rate increases and could slightly downgrade its assessment of the US economy.

Analysts debated the impact on foreign exchange of a widely anticipated meeting of major oil producers Sunday in Doha to discuss a potential agreement to limit output.

Ms Lien predicted the failure to reach a deal would lead to a collapse in oil prices, depressing the stock market but lifting the dollar "as risk aversion returns to the markets." Commonwealth Foreign Exchange said a breakdown in the Doha talks "could quickly deflate oil's recent rally, which would send equities and dollar/yen broadly lower as well."

AFP